Inco May Engage in Talks with Teck Cominco After Rejecting Hostile Takeover Offer

Strategic Insights -

The Canadian mining company, Inco, may consider engaging in talks with Teck Cominco after rejecting the latter's sweetened hostile takeover offer. The bid by Teck Cominco, which consists of $77.42 per share, including $40 in cash, may potentially surpass a friendly bid by Phelps Dodge, Inco's current suitor. As a leading nickel producer, Inco is looking to secure the highest possible price for its shares, according to David Kratochvil, an analyst at Rochdale Securities in New York.

Key Takeaways:

  • Inco may engage in talks with Teck Cominco after rejecting its hostile takeover offer, which amounts to $77.42 per share, including $40 in cash.
  • The bid by Teck Cominco may potentially surpass a friendly bid by Phelps Dodge, Inco's current suitor, which offers $85.67 Canadian dollars, including $20.25 in cash.
  • Inco, the world's largest nickel producer, is looking to secure the highest possible price for its shares.
  • Both Teck Cominco's and Phelps Dodge's offers are below Inco's current market price, sparking a bidding war.
  • The takeover attempt by Teck Cominco has been triggered by record prices of industrial metals.
  • Inco's failed attempt to acquire Falconbridge last month doomed a $42.5 billion deal between Phelps Dodge and Falconbridge.
  • Shares of Inco fell by 68 cents to $78.70 in afternoon trading in New York.

Statistics:

  • Price per share offered by Teck Cominco: $77.42, including $40 in cash.
  • Price per share offered by Phelps Dodge: $85.67 Canadian dollars, including $20.25 in cash.
  • Market loss of Inco's shares: 68 cents in afternoon trading in New York.
  • Market price of Inco's shares: $78.70.
  • Total value of the failed takeover attempt by Phelps Dodge: $42.5 billion.

Sources:

  • i, Choy Leng Yeong, "Inco May Engage in Talks with Teck Cominco After Rejecting Hostile Takeover Offer", no date.
  • "Record prices of industrial metals have triggered a spate of takeovers among mining companies seeking to increase production".
  • Inco, "Inco Statement" [Source not provided].